b

When does un-recaptured §1250 gains apply?

a) When the taxpayer makes the election.
b) It applies only when non-corporate taxpayers sell depreciable real property at a gain.
c) It applies when §1245 recapture trumps §1250 recapture.
d) It applies only when real property purchased before 1986 is sold at a gain.
e) None of these.

True

b

Brad sold a rental house that he owned for $250,000. Brad bought the rental house five years ago for $225,000 and has claimed $50,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

a

Which of the following is true regarding disallowed losses between related taxpayers?

a) The tax laws essentially treat related parties as the same taxpayer.
b) The holding period of the related party begins over.
c) The related party always receives a carryover basis.
d) The seller's realized loss is deferred until the buyer sells the assets.
e) None of these.

True

c

Which of the following is not true regarding §1239?

a) It only applies to related taxpayers.
b) It only applies to gains on sales of depreciable property.
c) It only applies to gains on sales of non-residential real property.
d) It does not apply to losses.
e) None of these.

a

a

Alpha sold machinery to Beta, a related entity, which it used in its business for $40,000. Beta used the machinery in its business. Alpha bought the equipment a few years ago for $50,000 and has claimed $30,000 of depreciation expense. What is the amount and character of Alpha's gain?

c

Which of the following transactions results solely in §1245 gain?

a) Sale of machinery held for less than one year.
b) Sale of machinery held for more than one year and where the gain realized exceeds the accumulated deprecation.
c) Sale of machinery held for more than one year and where the accumulated deprecation exceeds the gain realized.
d) Sale of land held for more than one year and where the amount realized exceeds the adjusted basis.
e) None of these.

c

Which of the following gains does not result solely in an ordinary gain or loss?

a) Sale of equipment held for less than a year.
b) Sale of inventory.
c) Sale of equipment where the gain realized exceeds the accumulated depreciation.
d) Sale of equipment where the accumulated depreciation exceeds the gain realized.
e) None of these.

True

c

Pelosi Corporation sold a parcel of land valued at $300,000. Its basis in the land was $250,000. For the land, Pelosi received $150,000 in cash in the current year and a note providing Pelosi with $150,000 in the subsequent year. What is Pelosi's recognized gain in the current and subsequent year, respectively?

False

c

Butte sold a machine to a machine dealer for $50,000. Butte bought the machine for $55,000 several years ago and has claimed $12,500 of depreciation expense on the machine. What is the amount and character of Butte's gain or loss?

False

False

a

Which of the following is not true regarding an asset's adjusted basis?

a) Tax adjusted basis is usually greater than book adjusted basis.
b) Tax adjusted basis is usually less than book adjusted basis.
c) Adjusted basis is cost basis less cost recovery deductions.
d) Tax adjusted basis may change over time.

True

b

Arlington LLC traded machinery used in its business to a machinery dealer for some new machinery. Arlington originally purchased the machinery for $60,000 and it had an adjusted basis of $28,000 at the time of the exchange. The new machinery had a fair market value of $35,000. Arlington also received $2,000 of office equipment in the transaction. What is Arlington's gain or loss recognized on the exchange?

True

b

Which one of the following is not a requirement of a deferred like-kind exchange?

a) The like-kind property to be received must be identified within 45 days.
b) The exchange must be completed within the taxable year.
c) The like-kind property must be received within 180 days.
d) A third party intermediary is often used to facilitate the exchange.
e) All of these.

True

a

How long does a taxpayer have to identify replacement property in a like-kind exchange?

a) The like-kind property to be received must be identified within 45 days.
b) The like-kind property to be received must be identified by the earlier of 45 days or the last day of the taxpayer's taxable year.
c) The like-kind property to be received must be identified within 180 days.
d) There is no deadline for the identification of replacement property.
e) All of these.

False

a

Leesburg sold a machine for $2,200 on November 10th of the current year. The machine was purchased for $2,600. Leesburg had taken $1,200 of depreciation deductions. What is Leesburg's gain or loss realized on the machine?

b

Bozeman sold equipment that it uses in its business for $80,000. Bozeman bought the equipment two years ago for $75,000 and has claimed $20,000 of depreciation expense. What is the amount and character of Bozeman's gain or loss?